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E-retail spending to increase 62% by 2016

U.S. consumers will spend $327 billion online in 2016, Forrester Research says.

Online shoppers in the United States will spend $327 billion in 2016, up 45% from $226 billion this year and 62% from $202 billion in 2011, according to a projection released today by Forrester Research Inc. In 2016, e-retail will account for 9% of total retail sales, up from 7% in both 2012 and 2011, according to the report, “U.S. Online Retail Forecast, 2011 to 2016,”by Forrester analyst Sucharita Mulpuru. That represents a compound annual growth rate of 10.1% over the five-year forecast period.

Forrester says it derives its estimates by analyzing trends in the monthly retail sales figures released by the U.S. Census Department; the Forrester estimates do not include sales of cars and trucks, gasoline, groceries and restaurant meals.

The report says that much of the growth in U.S. e-commerce sales comes from online retailers improving their web sites and services. “This is particularly true of categories such as apparel and jewelry, which have integrated rich selling tools such as zoom, color swatching, and configurators, as well as office supply stores, which have broader payment options (e.g., small business purchase orders online) and subscription plans for their buyers,” Mulpuru writes.

The steady growth in the number of web shoppers also is helping to boost e-commerce sales. Forrester says that 192 million U.S. consumers will shop online in 2016, up 15% from 167 million in 2012. But the bigger factor in driving e-commerce growth is that each shopper will spend more on average, the report says. U.S. consumers in 2016 will each spend an average of $1,738 online, up 44% from $1,207 in 2012.

Many consumers will prefer the web to bricks-and-mortar retailers in large part because of online deals, the report says—70% of holiday shoppers last year said they made purchases online rather than in stores because online retailers offered better deals.

Other factors contributing to the growth of e-commerce include:

• Aggressive merchandising and discounting from flash sale and daily deal retailers.

• More online loyalty programs, including shipping clubs such as Amazon Prime that offer free two-day shipping for a $79 annual fee. Forrester says that 12% of online shoppers belonged to such programs in 2011, up from 9% in 2010. Of those consumers who belonged to such a program last year, 61% said they bought from the retailer that operated the program.

• The increasing popularity of smartphones and tablet computers among consumers, which leads them to spend more time online, including for shopping. “The tablet shopping experience also likely encourages shoppers to purchase more products in an impulse fashion,” Mulpuru writes.